The government of Pakistan retired a total debt of Rs116.48 billion during the week ended January 16, 2026, bringing cumulative net retirement for the ongoing fiscal year 2026 to Rs334.36bn, according to weekly estimates released by the State Bank of Pakistan.
Government sector borrowing is categorized into three broad segments based on the purpose of loans, namely budgetary support, commodity operations, and others. During the reporting week, the bulk of the net retirement came from budgetary support, which recorded a retirement of Rs104.32bn. This indicates continued fiscal consolidation efforts by the government to reduce reliance on borrowing for routine expenditure management.
Commodity operations also contributed to the overall reduction in debt, with net retirement amounting to Rs12.13bn during the week. These operations generally relate to financing for procurement and management of essential commodities, and the retirement suggests relatively contained financing needs in this area.
Meanwhile, the “others” category, which includes miscellaneous government borrowing, witnessed a marginal net retirement of Rs28 million during the same period. Although small in value, this further added to the overall decline in government debt for the week.
As a result of these weekly movements, cumulative net retirement figures for the current fiscal year have reached Rs329.98bn for budgetary support, Rs2.64bn for commodity operations, and Rs1.74bn for other purposes. These figures reflect the government’s broader strategy to manage its borrowing requirements more prudently amid improving macroeconomic conditions.
The two primary sources of financing for budgetary support remain the State Bank of Pakistan and scheduled banks. Data for FY26 so far shows a significant shift in government borrowing patterns between these two sources. During the fiscal year, the government has retired a net sum of Rs2.07 trillion to the central bank. Within this, the Federal Government accounted for a substantial retirement of Rs2.15tr. In contrast, the Provincial Governments recorded net borrowing of Rs125.16bn, while the Azad Jammu and Kashmir government retired Rs26.39bn and the Gilgit-Baltistan government retired Rs18.37bn.
On the other hand, scheduled banks have emerged as a net source of financing for the government. Cumulatively, the government has borrowed a net Rs1.74tr from scheduled banks during FY26. Breaking this down, the Federal Government borrowed Rs1.94tr from these banks, while the Provincial Governments retired Rs194.87bn over the same period.
Overall, the latest figures highlight a notable reduction in government reliance on central bank financing, alongside increased engagement with scheduled banks. This evolving borrowing mix is generally viewed as supportive of monetary stability and reflects ongoing efforts to strengthen fiscal discipline and manage public debt more effectively during FY26.
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